Running head: PROBLEM SET

1
Chapter 2 E2-6

A job cost sheet of Chamberlin Company is given below:

Job Cost Sheet
JOB NO. 469

Quantity 2,000

ITEM White Lion Cages

Date Requested 7/2

FOR Todd Company

DATE

Direct Materials

Date Completed 7/31

Direct Labor

Manufacturing Overhead

15

440

550

22

380

475

540

675

7/10

825

12

900

24

1,600

27

1500

31
Cost of completed job:
Direct Materials

4,825

Direct Labor

1,360

Manufacturing Overhead

1,700

Total Cost

7,885

Unit Cost

3.94

Chapter 2 E2-6 (A1) What are the source documents for direct materials, direct labor, and
manufacturing overhead costs assigned to this job?
Direct Materials: Requisition Slip

PROBLEM SET

Direct Labor: Time Tickets

The Manufacturing Overhead: predetermined overhead rate

Chapter 2 E2-6 (A2) What is the predetermined manufacturing overhead rate?

In this case the predetermined manufacturing overhead rate is:
125% of direct labor cost. $550 / $440 = 125%.

Chapter 2 E2-6 (A3) What are the total cost and the unit cost of the completed job? (Round unit
cost to nearest cent.)
Cost of completed job:
Direct Materials

4,825

Direct Labor

1360

Manufacturing Overhead

1700

Total Cost
Unit Cost = 3.94 (7,885/2,000)

7,885

PROBLEM SET

Chapter 2 E2-6 (B) Prepare the entry to record the completion of the job.
7/31

Finished goods Inventory

Work in progress inventory

7885
7885

(To record completion of job 469)

Chapter 2 E2-9
At May 31, 2011, the accounts of Stellar Manufacturing Company show the following.
1. May 1 inventoriesfinished goods $12,600, work in process $14,700, and raw
materials $8,200.
2. May 31 inventoriesfinished goods $9,500, work in process $17,900, and raw
materials $7,100.
3. Debit postings to work in process were: direct materials $62,400, direct labor $32,000,
and manufacturing overhead applied $40,000.
4. Sales totaled $200,000

PROBLEM SET

Chapter 2 E2-6 (A) Prepare a condensed cost of goods manufactured schedule.

Stellar Manufacturing Company
Cost of Goods Manufactured Schedule
For the Month Ending May 31, 2011
May 1

Work in progress
Direct Material Used

$62,400

Manufacturing Overhead Applied

$40,000

Direct Labor

$32,000

Total Manufacturing Cost

Total Cost of Work in Process
May 31

$14,700

Less: Work in process

Cost of Goods Manufactured

$134,400
$149,100
$14,900
$131,200

PROBLEM SET

Chapter 2 E2-9 (B) Prepare an income statement for May through gross profit.
Stellar Manufacturing Company
(Partial) Income Statement
For the Month Ending May 31, 2011
Sales

$200,000

Cost of Goods Sold

May 1

May 31

Finished Goods

$12,600

Cost of Goods Manufactured

$131,200

Cost of Goods Available for Sale

$143,800

Finished Goods

$9,500

Cost of Goods Sold

Gross Profit

$134,300
$65,700

PROBLEM SET

Chapter 2 E2-9 (C) Indicate the balance sheet presentation of the manufacturing inventories at
May 31, 2011.
May 31, 2011: Finished Goods

9,500

Work in Progress 17,900

Raw Materials

7,100

Chapter 3 E3-5
In Kagan Company, materials are entered at the beginning of each process. Work in
process inventories, with the percentage of work done on conversion costs, and production data
for its Sterilizing Department in selected months during 2011 are as follows.

PROBLEM SET

Beginning Work in Process

Month

Units

Conversion Cost %

Ending Work in Process

Units Transferred Out

Units

Conversion Cost %

January

0 -

7,000

2,000

60

March

0 -

12.000

3,000

30

May

0 -

16,000

5,000

80

July

0 -

10,000

1,500

40

Chapter 3 E3-5 (A) Compute the physical units for January and May.
January physical units: 9,000 units of production
May physical units: 21,000 units of production

Chapter 3 E3-5 (B) Compute the equivalent units of production for (1) materials and (2)
conversion costs for each month.
Month

Materials

Conversion Cost

January

9,000

8,200

PROBLEM SET

March

15,000

12,9000

May

21,000

20,000

July

11,500

10,600

Chapter 3 E3-9
Cederholm Company has gathered the following information.

Units in Beginning Work in process

Units started into production
Units in ending work in process

-036,000
6,000

Percent complete in ending work in process:

Conversion costs
Materials

40%
100%

Costs incurred:
Direct materials

$72,000

Direct labor

$81,000

PROBLEM SET

Overhead

$97,000

Chapter 3 E3-9 (A) Compute equivalent units of production for materials and for conversion
costs.
Materials: (30,000 + 6,000) = 36,000
Conversion costs: (30,000 + (6,000 X 40%)) = 32,400

Chapter 3 E3-9 (B) Determine the unit costs of production.

Materials: (72,000 / 36,000) = $2.00
Conversion costs: (81,000 + 97,200) / 32,400 = $5.50

PROBLEM SET

10

Chapter 3 E3-9 (C) Show the assignment of costs to units transferred out and in process.
Units transferred out (30,000 X 7.50) = 225,000
Units ending work in process (6,000 X 2.00 = 12000) + (2,400 X 5.50 = 13,200) = 25,200